Mining & Metals

Precious Metals Are Just Warming Up

By: Steven Green, Wayne Lam, Derick Ma

Apr. 14, 2026 - 3 minutes

Mining workers handling equipment at a precious metals site.

What You Need to Know:

Strong metal prices point to continued strength for producers.
Most companies beat expectations, though cost guidance is edging up.
Record profitability may start rotating into high-value growth projects.
Free cash flow hit new highs and is expected to keep rising in 2026.
Buybacks are increasing, and capital returns are becoming a bigger driver.
Royalty and streaming activity are picking up, with larger deals and a solid pipeline.

Gold and silver producers ended 2025 on a strong note, with record free cash flow (FCF) supported by record metal prices and continued discipline. Looking ahead, with gold now trading higher than the US$4,153/oz Q4 average, we are expecting margin expansion in Q1 despite some industry cost inflation creeping in. Growing capital returns and consolidation should support improving multiples.

The sector marked a strong close to the year

In 2025, 17 of 24 reporting companies exceeding earnings per share expectations. Production and costs were broadly in line with forecasts. While several producers lifted 2026 cost guidance by approximately 10%–15% y/y, roughly half of these revisions were the result of gold-linked royalty increases (and profit sharing agreements). Sustaining capital spending was also higher as companies try to take advantage of the significantly higher metals prices.

Elevated gold prices continue to translate into record profitability

Gold averaged up 20% q/q, while Q1-to-date pricing sits around 19% above the Q3 average. All-in sustaining costs (ASIC) margins expanded further to a record 58% in Q4 and remain well above the five-year average of around 37%. Producers remain focused on balance sheet strength and shareholder returns but with a growing shift toward funding high-return organic growth projects.

Free cash flow reached another record high

Reported FCF across our coverage totaled $8.6 billion in Q4, representing a 56% q/q increase from $6.4 billion in Q3. Strong realized prices and capital discipline drove the step-up in cash generation; we expect this to continue growing in 2026.

Capital returns are accelerating; expect this to grow

Senior producers under our coverage deployed $5.0 billion in buybacks in FY25, up 2.5x from 2024 ($2.0 billion). Capital return announcements in Q4 further strengthened sector sentiment.

Records are being broken in the royalty space

Recent transaction activity has surprised to the upside in terms of volume and deal size. Silver deals have taken center stage as one company's record-breaking $4.3 billion silver stream re-defined what is possible for a stream transaction in this price environment and opens the door for other potential mega deals, in our view. Importantly, management teams continue to highlight a robust and diverse pipeline of precious metal deals with a broad spectrum of counterparties.

Discover more on the TD One Portal by downloading the full report, Precious Metals Q4 Recap; 2025 Was Only the Warm-up

Disclaimer

The views or opinions expressed herein represent the personal views of the writer and do not necessarily reflect the views of TD Securities or its affiliates.

This material is intended to provide commentary on the market for commodities discussed herein.

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Steven Green, CFA

Director and Research Analyst, Gold & Precious Minerals, TD Cowen

Steven Green, CFA
Director and Research Analyst, Gold & Precious Minerals, TD Cowen

Biography

Steven Green joined TD Cowen in 2002 and has been a precious metals analyst for over 20 years. Prior to entering the securities business, Steve gained diverse experience in the mining industry having spent 4 years working as a Mining Engineer at a gold mine, as well as working as an exploration geophysicist conducting exploration airborne geophysical surveys for mining companies around the world. Steve received his MBA from the Rotman School of Management (University of Toronto) in 2002, and received a Bachelor of Applied Science degree (Geological Engineering) from the University of Waterloo in 1998. Steve is a CFA® Charterholder.

Wayne Lam

Director and Research Analyst, Silver, Metals & Minerals, TD Cowen

Wayne Lam
Director and Research Analyst, Silver, Metals & Minerals, TD Cowen

Biography

Wayne Lam joined the TD Mining Research team in 2024 and is focused on North American precious metals. Prior to joining TD Cowen, he spent 10 years at RBC Capital Markets in Mining Research. Mr. Lam has an MBA from the Richard Ivey School of Business and a Bachelor of Applied Science (Engineering) from the University of Waterloo.